Since selecting appropriate partners in emerging markets is an integral component of the Winning in Emerging Markets course, the student decided to investigate how INSEAD® had come to choose its Chinese partner, “HOUYI Institute of Advanced Education”, for a deal that had just been signed. A very basic internet search conducted in Chinese instantly found strong evidence of HOUYI’s unsuitability due to legal and reputational issues in China. This was summarised and analysed in the student’s reflection paper entitled “Selecting the local partners”, which received a high grade and warm feedback from the grading professor.
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On November 23rd, 2018, Prof. Ilian Mihov, Dean of the world-leading business school INSEAD®, participated in the strategic cooperation agreement signing ceremony with its new strategic partner “HOUYI Institute of Advanced Education” on the INSEAD® campus in Singapore.
A few days after the signing ceremony, HOUYI posted the occasion on its official webpage. According to the site, INSEAD® and HOUYI announced that they would jointly launch the “Post EMBA-INSEAD – Future Business Leadership Programme”. In the announcement, pictures were posted which show Dean Prof. Ilian Mihov and Mr Cui Wei, founder of HOUYI, signing the contract and shaking hands in front of the INSEAD® and HOUYI logos. Dean Prof. Ilian Mihov mentioned that “INSEAD® is committed to supporting the Future Business Leaders Programme in collaboration with HOUYI Institute of Advanced Education, and he looks forward to its future success.” (Appendix 01: Announcement of INSEAD-HOUYI Strategic Partnership – Translated by court certified Translator in the United States of America)
[FIGURE-01] SIGNING CEREMONY – INSEAD® HOUYI STRATEGIC PARTNERSHIP; NOV 23RD 2018 [SOURCE: POSTEMBA.ORG.CN]
[FIGURE-02] SIGNING CEREMONY – INSEAD® HOUYI STRATEGIC PARTNERSHIP; NOV 23RD 2018 [SOURCE: POSTEMBA.ORG.CN]
In December 2018, the identical news was reposted on the official website of INSEAD®. In addition, HOUYI also reported on its website that INSEAD’s Dean of Non-Degree programme, Prof. Ben M. Bensaou, together with Assistant Professor Juan Ma (马涓), Academic Director of the INSEAD-HOUYI joint programme, and Mrs Dora Ng (黄映霞), Director of Corporate Partnerships, showed their hospitality by giving the HOUYI delegation a tour around the Singapore campus.
[FIGURE-03] SIGNING CEREMONY – INSEAD® HOUYI STRATEGIC PARTNERSHIP; NOV 23RD 2018 [SOURCE: POSTEMBA.ORG.CN]
The signing ceremony and the news reports drew the attention of the student who was at the Singapore campus on November 23rd 2018 during a module of his INSEAD® Dual-Degree EMBA programme. The event prompted him to conduct rudimentary research with the following results:
- The logo of “HOUYI Institute of Advanced Education” is identical to another association, “Beijing Post EMBA Alumni Association”. This organisation has a bad reputation for trademark infringement and unethical practices.
[FIGURE-04] LOGO [SOURCE: POSTEMBA.ORG.CN]
[FIGURE-05] LOGO [SOURCE: BDHEMBA.COM]
- The founder of “HOUYI Institute of Advanced Education”, Mr Cui Wei [崔巍], likewise founded the “Beijing Post EMBA Alumni Association”.
- A simple internet search with the combination of “Beijing Post EMBA association” and the name of its founder Mr “Cui Wei” [崔巍] provided links to an announcement made by Beijing University HSBC Business School (PHBS) categorically denying any affiliation with that organisation and pointing out the glaring trademark infringement in its Chinese name. This search also found a news report from china.com elucidating the legal issues of this organisation.
In the official announcement from Beijing University on July 12th, 2018 regarding the affiliation between Beijing University and “Beijing Post EMBA Alumni Association”, Beijing University issued the following statements: (see Appendix 02: Official Announcement of Beijing University – Translated by court certified Translator in the United States of America)
- Beijing Post EMBA Alumni Association (北京北大后工商管理促进会) is not affiliated with Beijing University. Beijing University has never authorised the Association to carry out any activities in the name of Beijing University.
- Beijing University has no partnership with the institution.
- Cui Wei [崔巍], The Founder and Dean of the Beijing Post EMBA Alumni Association, is not a faculty member of Beijing University.
- In the training programme organised by the Beijing Post EMBA Alumni Association, the publicity materials referring to professors related to Beijing University have never been authorised by Beijing University.
- Beijing University – abbreviations in Chinese “北大” is a trademark registered by Beijing University.
- Beijing University and relevant professors reserve the right to pursue legal action against the relevant institution and responsible persons for infringements on registered trademarks.
On August 8th 2018, one month after the announcement of Beijing University was published, a journalist from china.com conducted an undercover investigation. His findings showed that the Beijing Post EMBA Alumni Association was still active and promoting their domestic Post-EMBA programme, charging 79.8K RMB (approximately $113,000 USD) in tuition fees. China.com labelled “Beijing Post EMBA Alumni Association” as an “infamous institution” and referred to the announcement from Beijing University that any organisation or individual holding a similar Post-EMBA training programme referencing the name of “Beijing University” is a violation of the registered trademark. This report was reposted in sina.com, one of the most significant news media sources in China. (see Appendix 03: News report of sina.com – Translated by court certified Translator in the United States of America)
The student summarised his concern about the legitimacy and reputation issues of “Beijing Post EMBA Alumni Association” and its founder Mr Cui Wei [崔巍], in the reflection paper of the course Winning in Emerging Markets taught by Prof. Xiaowei Rose Luo of INSEAD®. The announcement from Beijing University, as well as the news report reposted on sina.com, was partly translated into English in the paper and links were also provided for reference. The reflection paper was submitted to Prof. Xiaowei Rose Luo on December 12th, 2018.
In the reflection paper, the student chronologically listed all relevant evidence, summarized in the table below, that the agreement signed by Dean Prof. Ilian Mihov on November 23rd, 2018 lacked legal compliance check and due diligence. The student explained how the collaboration with HOUYI would not only massively damage the image of INSEAD® in the short-term and destroy its value in the long-term but also demonstrates that the executives of INSEAD® lack basic business common sense in doing business in emerging markets. INSEAD® made an elementary mistake in selecting a local partner in an emerging market which is only seeking short-term resources, without having long-term strategic planning.
|July 12th, 2018||Beijing University announced a statement about “Beijing Post EMBA Alumni Association” and clarified that Beijing University has no affiliation whatsoever with it. Furthermore, the organisation’s name infringes on Beijing University’s trademark.|
|August 8th, 2018||Sina News listed “Beijing Post EMBA Alumni Association” as an infamous institution.|
|November 23rd, 2018||Dean of INSEAD® signed a strategic cooperation agreement with the founder of “Beijing Post EMBA Alumni Association.”|
[TABLE-01] LIST OF DATES & EVETS
At the end of the paper, the student recommends the course Winning in Emerging Markets delivered by Prof. Xiaowei Rose Luo to Dean Prof. Ilian Mihov and Dean Prof. Bensaou.
Grade & Feedback
On March 15th, 2019, the student received the Course Assessment Sheet of the reflection paper from Prof. Xiaowei Rose Luo. Grade 3.7 (out of 4.0); The comments were as follows:
“Thank you for analysing INSEAD’s strategic partnership with this Chinese partner organization. Indeed the pursuit of short-term resources can lead to a hasty decision, and the lack of information in emerging markets worsens the situation. Your application of the partnership framework, especially the consideration of reputation, is well done. I also appreciate your analysis of the potential organizational reasons that led to this partnership error. P.s., I have shared with our Dean and the director who was closely involved in this partnership decision. Indeed there was a lack of due diligence, and I had the opportunity to share some important lessons in strategic partnership in emerging markets. Thank you very much for your care for INSEAD. ” (see Appendix 04: Course Assessment Sheet of the reflection paper from Prof. Xiaowei Rose Luo)
It should be noted that “HOUYI Institute of Advanced Education” and “Beijing Post EMBA Alumni Association” are the same organisation, only operating under different names. “Beijing Post EMBA Alumni Association” was renamed to “HOUYI Institute of Advanced Education” shortly before they signed the contract with INSEAD®. Both organisations have the same logo and founder. The webpage of “HOUYI Institute of Advanced Education” states at the bottom right: “Copyright 2014 Beijing Post EMBA Alumni Association”. Further, the webpage registration number “京ICP备18003387号-1” is described as registered to “HOUYI Institute of Advanced Education” in the copyright declaration online. However, the number is actually registered to the “Beijing Post EMBA Alumni Association” in the registration database.
[FIGURE-06] COPYRIGHT – HOUYI [SOURCE: POSTEMBA.ORG.CN]
[FIGURE-07] ICP REGISTER HISTORY – BEIJING POST EMBA ALUMNI ASSOCIATION [SOURCE: BEIANBEIAN.COM]
[FIGURE-08] ICP REGISTER UPDATED ON 2019/9/18 – HOUYI BUSINESS ADMINISTRATION PROMOTION COUNCIL [SOURCE: ICP.CHINAZ.COM]
In HOUYI’s official webpage, it is clearly described that the predecessor of “HOUYI Institute of Advanced Education” was “Beijing Post EMBA Alumni Association”. In Chinese, “原北京北大后工商管理促进会又称后E促进会 ”. Using Beijing University – abbreviations in Chinese, “北大” was a flagrant infringement of the trademark.
Questions & Answers
What was your initial motivation for researching the INSEAD-HOUYI partnership?
The course Winning in Emerging Markets was being hosted at the Singapore campus, and I saw the Chinese delegation on the campus. The main purpose of the course was to provide us with a framework with which to win business in emerging markets such as China, and how to select the correct local partner was a fundamental area of the framework. I wanted to understand how INSEAD® would conduct business in emerging markets.
What did you hope to accomplish with the reflection paper “Selecting the local partners”?
In the beginning, it was simply completing an assignment for the course. I summarized the issues from my point of view to the school and considered the assignment complete once the paper was submitted.
Of course, I am also interested in how the school deals with this situation. I looked forward to learning from the deans.
Is the official announcement from Beijing University HSBC Business School (PHBS) or from Beijing University?
It is an official announcement of Beijing University. Beijing University HSBC Business School (PHBS) reposted it in PHBS’s webpage. The announcement is available from PHBS as well as Beijing University’s webpage.
What did you mean by recommending the Winning in Emerging Markets course to Dean Prof. Ilian Mihov and Dean Prof. Ben M. Bensaou in your reflection paper?
It is a requirement of the assignment to make a recommendation in the reflection paper. The outcome of the research, noted in the reflection paper, was frankly shocking that this partnership was made hastily and without due diligence. Therefore, the decision from Dean Prof. Ilian Mihov and Dean Prof. Bensaou to start a partnership with a disreputable association would directly damage the image of INSEAD® and indirectly damage the tuition fee investment of INSEAD® students. The course Winning in Emerging Markets would allow the deans to learn the value of selecting the appropriate partner.
In addition, continued learning is essential for any executive who wants to grow their management capability. This is one of the most important reasons to go to business school to learn. Therefore, I do not see any reason why Dean Prof. Ilian Mihov and Dean Prof. Bensaou as executives would refuse to learn.
In your opinion, do you believe Prof. Xiaowei Rose Luo really communicated the reflection paper to Dean Prof. Ilian Mihov?
In the beginning, I doubted, because I never heard from Dean Prof. Ilian Mihov, but after I received my positive grade and comments in the feedback, yes, I do believe she shared with the Dean. Later on, she shared more information via voice message. During the subsequent communication with the Prof. Xiaowei Rose Luo, she began to change her position on the partnership and explained to me that HOUYI has already “stopped doing evil and return to good”. She mentioned that HOUYI was recommended to INSEAD® by Assistant Professor Mrs Juan Ma, who was appointed as Academic Director of the INSEAD-HOUYI programme. Based on the information provided by Prof. Xiaowei Rose Luo, druing Prof. Juan Ma’s PhD phase at Harvard Business School, she was involved in the collaboration between Harvard and Beijing Post EMBA Alumni Association.
Is the HOUYI Business Administration Promotion Council mentioned in [FIGURE-08] a new company?
No. HOUYI Institute of Advanced Education is renamed again on September 18th 2019 to HOUYI Business Administration Promotion Council.
Did any other students or alumni of INSEAD® question the INSEAD-HOUYI agreement?
The announcement was posted in the INSEAD® official webpage and WeChat. I don’t know. I hope I was not the only one. INSEAD® has educated more than 1500 MBA and EMBA alumni in China in the past 60 years. If I am the only one who has doubted, investigated and followed up, perhaps INSEAD® should seriously rethink about their core values and what kind of leaders they should educate.
In an organisation or community, the executives or leaders have the responsibility to cultivate a culture which encourages staff or anyone in the community to bring bad news. The bad news is good news even if the bad news relates to historical facts that cannot now be helped. However, knowing the bad news is the starting point to take further action to correct the situation. No news is bad news. If nobody in your organisation feels comfortable to question or challenge your decisions, you will become arbitrary.
 IT WAS DELETED FROM THE OFFICIAL WEBPAGE OF INSEAD® AT END OF MAY 2019.
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